How does a Family Gift Fund work?
You can start your Family Gift Fund by signing a simple agreement and irrevocably funding it with as little as $10,000. Principal and earnings of the fund are available for ministry. As God lays special ministry needs on your heart, you can contact the LCMS Foundation to recommend the ministry and the amount of support that you would like provided.
Below is a set of frequently asked questions that donors like yourself ask The LCMS Foundation about Family Gift Funds.
Is The LCMS Foundation required to follow my recommendations?
No. Unlike a private foundation, you cannot control the fund. With a Family Gift Fund The LCMS Foundation must retain control of the fund.
How else is a Family Gift Fund different than a private or family foundation?
A Family Gift Fund is much easier to start and operate. Since it is not a separate entity there is no tax exempt status to obtain or tax returns to file. That is why an LCMS Foundation Family Gift Fund can be started with as little as $10,000 while some experts recommend a minimum of a million dollars or more to start a private foundation. Finally, there are less restrictive tax deduction rules for a gift to a Family Gift Fund because it is a gift to a public charity.
How do I make recommendations?
Recommendations can be submitted in writing to the LCMS Foundation. A form is available at "How can I establish a Family Gift Fund."
What if I do not make any recommendations in a given year?
You are not required to make distribution recommendations. However, if the annual distribution from all Family Gift Funds held at the Foundation is less than 5 percent, the advisors on individual funds that distributed less than 5 percent will be contacted to make recommendations. The Foundation will distribute a minimum of 5 percent of the value of all Family Gift Funds held at the Foundation each year.
In the last several years, the Foundation has distributed between 10 and 20 percent annually from all its Family Gift Funds.
Can my family make recommendations?
In the agreement you can name yourself or others as the “advisor” - the person entitled to make distribution recommendations. You can name as many advisors as you like, however only one person can serve as advisor at a time.
What if an Advisor decides to no longer make recommendations?
An advisor can resign by sending written notice to the Foundation and the next advisor listed in the agreement will then take over.
Are there any restrictions with the recommendations?
The minimum amount that the Foundation will distribute from the fund is $250 per ministry. There is no maximum distribution. Distributions can be made from income and/or principal. All distributions must be made to tax-exempt public organizations. The Foundation will verify an organization’s tax-exempt status before a distribution is made. Distributions cannot be used to benefit you or your family in any way.
Can I make recommendations to non-Lutheran organizations?
Yes. At least 51 percent of the annual distributions from your fund must benefit an LCMS ministry listed in The Lutheran Annual. The Lutheran Annual is compiled by the LCMS Department of General Services and Office of Rosters and Statistics and lists over 10,000 ministries, including all LCMS congregations and schools, the boards and programs of Synod, the Concordia Universities and Seminaries, and recognized service organizations.
Will I get any reports regarding my fund?
You will get a written receipt for every contribution you make to the fund. The advisor will also be notified of each distribution and receive periodic account statements. The statement will describe each distribution, each contribution to the fund, the income realized by the fund during the year, and the ending value of the assets held by the fund as of the last day of the statement period.
Can I make additional contributions to the fund?
Yes, provided the funding asset is acceptable to the Foundation. Cash and publicly traded securities are always acceptable. You can also name your fund as a beneficiary in your will or other testamentary gifts.
Are there any costs or administrative fees charged to the fund?
There is no cost to establish your fund. The only cost that your fund will incur is a 1/12 of 1.1 percent amount that will be distributed monthly to support the work of the Foundation counseling and assisting others in using their blessings to further the Lord’s work. This amount is comparable to an administrative fee other entities may charge for a Family Gift Fund, but with an LCMS Foundation Family Gift Fund you have the satisfaction of knowing that it is being used to further the ministries of the LCMS.
How will the fund be invested?
The fund will be invested in the LCMS Foundation Standard Funds. The LCMS Foundation has established the Standard Funds with the assistance of its investment consultant. Performance and makeup of the Standard Funds are available upon request or by visiting the Foundation website at www.LCMSFoundation.org.
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